News and thoughts on the Real Estate Development & Construction

Construction

November 03, 2014

In my estimating travels, I come across a lot of small jobs. Wall demo here, relocate this there, etc. Largely, these types of jobs are for tenants directly and not through property management. What I find is that most tenants are surprised by the cost of what they want done, and I think it largely stems from not having a full understanding of what goes into their request.

For example, a seemingly simple wall demo requires (usually) the services of an electrician, demo company, drywaller, painter, flooring, acoustical tiling, and perhaps HVAC or fire alarm. What you saw as a few hours of some dudes knocking down a wall just got more complicated and thereby more expensive.

This is what I've come to term "Death by a Thousand Cuts". It's not that the whole job is big, but that it's made up of lots of little pieces and each of those pieces is someone's labor and materials.

Estimators Beware

I have also tried to take this into account as I look at new jobs. I try to be very cognizant of the affects of one request and see what that request will truly generate. Too often I have been caught not paying attention to all the connected items that are generated and not accounting for them, and they end up coming out of my budget.

I think one of the best parts of this job is trying to think through the entire project in your head beforehand to see where it could go wrong. That thinking needs to continue through the creation of the project schedule as you lay out potential conflicts with deadlines and subcontractors.

The Upshot

If I was talking to anyone planning any kind of renovation (even residential), I would advise them to engage an Architect or Contractor up-front to talk about how their design decisions will affect their desired budget. Use their knowledge and experience to help you think through those "unforseen conditions" which could have been handled or at least discovered at the beginning with some careful thinking and planning.

October 23, 2012

I am apparently a little behind on this, but last year, Mattel came out with a new Barbie doll in their series of "I Can Be..." Barbies showcasing different career paths for Barbie. The specific doll in question here is Architect Barbie.

Although a bit off topic from my normal posts, this one hits closer to home because of my chosen field and the fact that I have a daughter who I would likely encourage into a career in the real estate realm.

While I recognize Mattel's need to have glamorous representations of everything for Barbie, this (and probably others in the career line) comes off, at least to me, as particularly unrealistic. I think there's a fine line here between trying to make a career like Architecture attractive to young girls through exposure to Architect Barbie, and trivializing the experience or position by giving her a hot pink plan tube/yoga mat carrier. Not to meniton that Barbie is apparently carrying the plans for her ubiquitious "Dream House" along with her, which most Architects could probably never afford.

Architecture, like most jobs, is not all cute pillows, international travel and acclaim. Like most professions, it can be very hard to get to the top and not spend your days drawing bathroom stalls and stairs.

In fact, an 8-year old girl wrote to Dwell magazine earlier this year, criticizing Architect Barbie for not including any further information about Architecture itself to further young girls' curiosity about the career path:

"If you're going to send a girl an Architect Barbie, then you should send something about architecture with it so that she knows what that doll means. Otherwise, she might use that Barbie for a different purpose like putting its clothes on a different Barbie doll and forgetting about it."

It's also been noted by some that Barbie's footwear is incredbily unrealistic for walking a jobsite, seeing that she comes equipped with an über-cute hardhat.

"It's as if these naysayers were saying that a rail-thin, perfectly coiffed blonde can't actually roll with the big boys—that she should put those blueprints down, go to a nail salon, relax with a Cosmo, and let the real men do the work."

It really seems to me that this sort of representation of a real career actually serves to put the pursuit of that career farther out of reach of girls like my own daughter. I would hate to give her this kind of present that trivializes her career aspirations, whatever they may be.

September 18, 2012

I came across a wonderful TED talk by Julian Treasure about the influence of poor sound design on our built environments and how it affects our health, our social interactions and our overall production and wealth.

I find it very interesting that our focus on making healthier spaces via LEED and other programs is missing (apparently) a crucial piece of design for occupants' health and well-being. The impacts Treasure demonstrates in his video are astonishing and he uses recorded sound to great effect in demonstrating the problems facing these built environments and the associated costs (both in loss of productivity and costs to remedy).

A great video and, as with all TED talks, very brief. Please do take a minute to watch.

Update: the video is not appearing on the blog for me, so if you can't see it, here's the link: http://www.ted.com/talks/julian_treasure_why_architects_need_to_use_their_ears.html

May 23, 2011

I'm watching a Travel Channel program called "Outer Limits" and they are currently in Seattle showcasing the hydroelectric source of 90% of Seattle's power. Essentially, in 1903 they built a 10-mile long wooden flume to shunt water from a river down to a hydroelectric plant.

They built this incredible structure over treacherous mountain terrain, in awful weather and with unsophisticated tools (at least in comparison to what we have today). However, with all those impediments they were able to construct all 10 miles of wooden flume (with a rail line along the top of it) and the hydroelectric powerhouse in 18 months.

How is that possible? What happened to construction over the last 100 years that would make that project today take 10 years?

One of my most viewed posts here is my photo of the new bridge at the Hoover Dam. The Hoover Dam, one of the world's engineering marvels was completed in only 5 years.

Construction has gone so terribly wrong, and it remains to be seen if we will ever be able to get back.

For those of you who wonder the same thing, I suggest reading "Commercial Real Estate Revolution" and "Broken Buildings, Busted Budgets". Both books are linked from my site and I think have great suggestions as to how to get things back on track.

March 11, 2011

I think everyone's hearts and prayers go out to Japan this morning after one of the largest earthquakes on record, anywhere.

One thing that struck me this morning was the low number of reported deaths (so far) particularly in one of the world's most populated cities. As of 10:00 AM PST this morning, MSNBC is reporting "hundreds" dead which is a very small number considering that the death toll from the recent Haiti earthquake (a full 1.9 magnitude smaller) has been pegged at around 47,000. The difference is staggering.

So much of this has to be tied to building codes and engineering, and the fact that we're seeing less destruction in Tokyo than one would expect after a massive earthquake like that. A large reason is that Japanese engineers design buildings with earthquakes in mind and build in the ability for buildings to "sway" and absorb the waves, rather than remain rigid and crack at movement points. Here's a great video from this morning that illustrates it perfectly:

Imagine the loss of life and property damage if just the three buildings in this video crumbled, much less the hundreds of other skyscrapers in Tokyo. It really goes to show you what kind of impact the building community can have in preparing for and preventing the worst when a natural disaster occurs. Something we should keep in mind here in San Francisco.

In speaking about how increased productivity in Construction would benefit the whole country he writes:

"Higher construction productivity would mean lower construction costs and hence more construction projects. Improving construction would lead to safer buildings and better infrastructure - bridges, highways, railroads and tunnels. Similarly, lower housing construction costs would allow an even higher percentage of Americans to purchase their own homes and enjoy a true ownership stake in their country. Higher productivity rates would also mean more terrorism-resistant structures and the erection of more sustainable quality buildings. Perhaps most enticingly of all, lower construction costs would spell lower taxes."

Construction is a pretty risk averse industry. Few want to do things in a new way, few want to change. I believe that many think increased efficiencies means reduction of jobs (which there may be some of), but I think LePatner is right above in that when you increase efficiency, you'll increase the total amount of building in the US. He makes the point that if construction costs were lower, users would much rather choose to build new structures than stay in their old ones.

I really recommend this book as well as "Commercial Real Estate Revolution" to get a real insight into what's going on in the Construction industry today and where the opportunities lie.

January 22, 2011

I read a great quote this evening that really made me think about the extent at which you should listen to customers and the point at which you stop listening and try to ram something down their throats because you know it's better for them.

The quote is from Henry Ford:

"If I'd asked my customers what they wanted, they would have said, 'A faster horse'."

Construction can be incredibly entrenched sometimes. People are reluctant and resistant to change. Sometimes, clients don't know what they want until they have it. Sometimes, you have to ignore the "no's" and keep going.

No one really wanted a faster horse, they just didn't know yet that they wanted a car.

"When military investigators looked into an attack by American helicopters last February that left 23 Afghan civilians dead, they found that the operator of a Predator Drone had failed to pass along crucial information about the makeup of a gathering crowd of villagers.

But Air Force and Army officials now say there was also an underlying cause for that mistake: information overload.

At an Air Force base in Nevada, the drone operator and his team struggled to work out what was happening in the village, where a convoy was forming. They had to monitor the drone’s video feeds while participating in dozens of instant-message and radio exchanges with intelligence analysts and troops on the ground."

I share this awful story with you to make a larger point about information. Our problem used to be a lack of information and we are quickly entering (if not already there) an age of over-information where the true desired skill will be the ability to intake, organize and accurately represent information to the end user.

We so often run up against projects/companies using a wide variety of tools to manage information: Box.net, Sharepoint, CMiC, Prolog, ftp, Projectwise, etc. Most of these companies I talk to feel secure that by having these tools/databases, they are providing for information sharing and collaboration among their team members. I submit that without the right tools/people in place, you are actually hindering the process of communication, sometimes with disastrous results.

The above example of the civilian deaths is the extreme example of what can happen when there's too much information, but it's not a big leap of faith to imagine a Subcontractor not knowing which document out of 20 that he should utilize and subsequently endangering the project schedule or budget.

Information Explosion

Lately, When talking about what I/we do in the reprographics industry, I increasingly refer to us as the Librarians of the Library. Everyone in the industry talks about the death of print, but few look at the explosive growth of information, particularly in construction. While plan printing has reduced drastically, your clients are dealing with volumes and volumes more data than they ever have before. The relative ease of creating information these days (AutoCAD, email, site photos, PDFs) means that authorship has gone way up where everyone on the project creates a meaningful document multiple times a day. That information is all important and it can be incredibly overwhelming if not controlled.

When selling your solution, don't talk about its ability to hold information. Storage space and ability is cheap. Talk about your ability to get the client down to what they want, right away. Talk about your team's ability to be the Librarian in the Library that controls the documentation, organizes it and makes it relevant and easy to use for the team.

FM'd Employees

I believe there's a market for reprographic companies to provide employees on jobsites that will act as the Document Control person. We are already seeing this happen in our market where Contractors are designating a Project Engineer (aka: someone who's never done this before) and creating a Document Control role. If you can place that person on-site, not only do you have the experience with construction documentation organization/fulfillment that they don't but you will be more likely to get them to use your document management solution on the project.

And, if we have to talk about a printing angle, what better way to ensure that you're getting the maximum amount of output than employing the Traffic Cop!

I believe many Reprographic firms are struggling with how to maintain their relevance in their Client's eyes and the shift in thinking to being true information managers will be the wave of the reprographic future.

June 28, 2010

Last week, I diligently stood in line at my local Apple store to get my hands on the new iPhone 4. An amazing little device, and definitely a big jump up from my previous 3G model.

One of the new features that comes with this version is called "Face Time". It's essentially video calling in the palm of your hand. You're able to dial up a friend (who also needs to have the iPhone 4) and during your regular conversation, you can initiate a video call and you will switch seamlessly to talking to that person, face to face. Once I got it up and running, I immediately called my brother in Las Vegas to test out this new service. I was unsure at first what I would think about communicating this way on a regular basis.

After spending a few minutes getting over the awe of what we were doing (and making some obligatory Star Trek references) I really found video to be a great way to communicate. Our conversation took on a different level of depth. We could see each other's facial expressions, hand movements used to illustrate points and were overall experienced, I thought, richer communication.

Not only that, but at one point, my brother utilized the rear camera on his iPhone and took me on a tour of his office, pointing out the exam rooms, the receptionist, even the weather outside. To me, that was the most powerful part of Face Time. I was able to be there, in Las Vegas, in my brother's office in real time without leaving my chair.

Get to the point already...

So this got me thinking about the value of live video tours of far off locations, and of course I thought of construction and the power of Face Time on a jobsite.

Construction is really all about time management. You have a lot to do, and only so many hours to do it in, so the more efficient you are, the faster you get the building up and the happier the developer is. Delays upset everyone.

Along with that certainty, it is certain that the project will never go as planned. There will always be new information, weather delays, unexpected conditions and mistakes that delay the project. Many of these delays necessitate a lengthy process to re-plan some part of the construction based on found conditions. However, what if we could drastically shorten the time from problem to solution? Imagine this:

A Superintendent walking the jobsite comes across a problem where some installed components will clash with other existing installed building components. Instead of stopping the job and getting the Project Manager and/or Architect to come down to the site to review the problem, develop a solution, get approval from the Owner and then issue the instructions, the Superintendent could initiate a call to the Project Manager, describe the situation, then turn on his camera to show the PM the on-site conditions. He could then conference in the Architect, Engineer and Owner (wherever they are) immediately and get it resolved and approved in a drastically shortened period from the normal process.

Also, think of a Developer located in another site that wants to be kept up to date on his project. The General Contractor could literally walk his client through the project on a weekly basis and discuss any needed changes or concerns; instantly.

It's about communication

For construction to be successful, there has to be great communication. The world of email is fast and convenient, but you lose so much information in the process. In person communication is rich and satisfying but can take a lot of time and money depending on where the parties are. I think Apple could really revolutionize industries (like construction) by making in-person communication as fast, easy and convenient as an email or a phone call.

It's definitely yet to be seen whether this will catch on or not, and there are definitely some technology and wireless network hurdles to get over before it becomes commonplace, but I believe that a forward thinking developer or contractor should start to seriously look at the impact that handheld video calling could have on their projects.

What do you think about the future of this kind of technology in Construction? Stud or dud? Please leave comments to continue the discussion. Thanks.

September 25, 2009

I was at a General Contractor's field office the other day, and the white boards in the Conference Room (as usual) were all marked up with meeting notes.

However, the notes were not about best materials placement, or value engineering, they were about saving time. The board was filled with strategies on how to shave days off the schedule in order to get the project completed faster. They were not only measuring the days saved by certain measures, but also the days they'd be penalized if they didn't do something correctly leading to a net loss of time on the project.

Concurrently, I'm reading the book "Construction Funding: The Process of Real Estate Development, Appraisal, and Finance, 4th Edition" (which I highly recommend for those that want to know more about how Development actually happens). The book covers an end-to-end development process from the Developer's point of view. Reading about some of the extraordinary pressures the developer is under from investors, creditors and lenders regarding time, made me really understand the project's insistence on saving as much time as possible. The developer's time crunch becomes the GC's time crunch.

The takeaway for you is to remember that when you're selling in construction, the real cost to any project is the cost of time. You can always find more money to fund your project. There's always another investor, or getting the bank to lend you more capital, but no amount of money on Earth can buy back a day. A day lost is simply that. If you lose 15 iron beams, you can buy more. If you have to hire another person to get the job done, there's money built in for that. But there is no way you can buy time.

If you show your clients, especially owners, how what you're doing will save them time (which we all know is equal to money) you'll be talking directly to their primary concern and you'll get their attention.